Natural Gas Technical Analysis and Near-Term Outlook

The outlook for natural gas remains bearish due to the sustained close below $2.48. This was a highly confluent and crucial wave projection for the January contract and the continuation chart that connects to $2.15 as the next major objective. Near-term odds favor a continued decline and a close below $2.37 will clear the way for $2.33 and likely lower during the next couple of days.

With that said, Monday’s potential intra-day exhaustion gap, today’s inverted hammer, and confirmed weak bullish KasePO, KaseCD, and MACD divergences suggest a bottom might be forming. These signals do not exude a bullish shift in sentiment, but a move above $2.52, the smaller than (0.618) target of the wave up from $2.368, will call for a test of $2.58. Rising to $2.58 would overcome Monday’s gap down and confirm that this was most likely an exhaustion pattern. A close above $2.58 would call for a larger test of resistance with the next thresholds at $2.67 and $2.76.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural Gas Technical Analysis and Near-Term Outlook

Natural gas took out the $2.823 swing low and confirmed the small double top that formed around $3.00. Natural gas also settled below the 62 percent retracement of the rise from $2.656. Odds favor a continued decline and the waves and subwaves down from $3.002 call for a test of at least $2.70 and likely $2.66 tomorrow. The double top’s target is in line $2.66. The $2.66 objective is key because this is also the equal to (1.00) target of the wave down from $3.507 and the smaller than (0.618) target of the subwave down from $3.204. Settling below $2.66 will clear the way for the next leg of the move down to $2.54 and eventually $2.47.

There are no bullish reversal patterns or signals that call for the move down to stall. Even so, should natural gas bounce before falling much lower look for initial resistance at $2.84. Rising above this will call for $2.90, which is expected to hold. Key resistance is $2.97, the smaller than target of the wave up from $2.656 and the 38 percent retracement of the decline from $3.507. Settling above $2.97 would clear the way for $3.09 and possibly higher.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural Gas Technical Analysis and Near-Term Outlook

January natural gas fulfilled the $2.99 objective as called for at today’s $3.002 high. This objective held on a closing basis as expected and a test of support is underway. However, the decline from $3.002 will likely prove to be a short-lived correction of the move up from $2.656. This is because the newly formed primary wave up from $2.656 met its smaller than (0.618) target at $3.002. Therefore, this wave now favors a move to fulfill its $3.09 equal to (1.00) target, which is in line with the 50 percent retracement of the decline from $3.507. Settling above $3.09 will call for a test of key resistance and the decision point for a renewed bullish outlook around $3.19.

The decline from $3.002 has already retraced 21 percent of the move up from $2.656. There is a good chance for natural gas to fall to $2.87, the 38 percent retracement, before the move up continues. Support at $2.87 is expected to hold. Closing below this will call for key near-term support at $2.79. Settling below $2.79 would shift odds back in favor of challenging major support at $2.66 again.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural Gas Technical Analysis and Near-Term Outlook

Natural gas settled below crucial support around $2.72 for the third straight day. Odds continue to favor a larger decline and a test of the next major objective at $2.51. Falling below $2.68 will call for $2.63, which then connects to $2.51.

Nevertheless, Tuesday’s long-legged doji and Wednesday’s inverted hammer suggest a larger test of resistance might take place before taking out $2.63. Today’s initial move up held Monday’s $2.78 midpoint, but a close above this will complete the long-legged doji and inverted hammer. This would then call for a test of $2.82 and possibly $2.87. The $2.87 level is key for the near-term because this is the confirmation point for the long-legged doji and inverted hammer and is in line with the bottom of Monday’s gap down from $2.949. Settling above $2.87 is doubtful but would reflect a bullish shift in external factors and sentiment.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural Gas Technical Analysis and Near-Term Outlook

Natural gas rose to challenge important near-term resistance around $3.05 this afternoon. This is a confluent wave projection and the 38 percent retracement of the decline from $3.396. This is also a potential stalling point. However, today’s close above $3.03, the smaller than (0.618) target of the primary wave up from $2.821, calls for a test of $3.12 and possibly $3.18 during the next few days. The $3.12 objective is the equal to (1.00) target and 50 percent retracement. The $3.18 objective is the intermediate (1.382) target and 62 percent retracement. The latter objective is most important because settling above $3.18 would reflect a bullish shift in external factors (e.g. weather) and near-term sentiment.

Nevertheless, the move up is still corrective of the decline from $3.396 and also stalled near the 100-day moving average this afternoon. Additionally, because of the confluence and importance of resistance around $3.05, a test of $2.97 will probably take place first. Falling below this will call for key near-term support at $2.91. This is the 62 percent retracement of the rise from $2.821 and is in line with the $2.911 swing low. Taking out $2.91 will invalidate the wave up from $2.821 that calls for $3.12 and $3.18 and would shift odds back in favor of another test of $2.82 and likely lower.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural Gas Technical Analysis and Near-Term Outlook

Then near-term outlook for natural gas remains bearish and a close below $3.03 will call for another attempt at $2.98 and lower. However, as stated in yesterday’s update, the decline from $3.369 lacks a wave structure that can sustain a larger test of support without testing resistance soon. Today’s bullish hammer, confirmed intra-day bullish divergences, and the wave formation up from $3.002 suggest such a move will probably take place tomorrow.

Rising above $3.09 before taking out $3.03 will call for a test of $3.15. This is a confluent wave projection, the 38 percent retracement of the decline from $3.396, and the hammer’s completion point. Closing above $3.15 is currently doubtful but would call for a more significant test of resistance where $3.25 is the hammer’s confirmation point and the barrier to a renewed bullish outlook.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural Gas Technical Analysis and Near-Term Outlook

The near-term outlook for natural gas leans bullish. However, this is still a tight call because the $3.37/$3.362 double top is still intact and this week’s move up stalled near the equal to (1.00) target of the wave up from $3.159. Also, today’s Harami candlestick is negative and the wave down from $3.336 met its smaller than (0.618) target this afternoon. Therefore, a test of $3.25 and possibly $3.22 is expected before overcoming $3.33. This implies that trading will most likely remain range-bound for another few days before the move up continues.

Closing above $3.33 will call for a test of key resistance at $3.37. This is the most confluent target on the chart, a close above which will negate the double top and clear the way for $3.43 and higher.

For natural gas to overcome $3.37 during the next few days, support at $3.22 must hold. Closing below this will take out the smaller than target of the wave down from $3.362, which would call for a test of the $3.13 equal to target. This level is crucial for the near-term because a close below $3.13 will call for $3.09. This is the 62 percent retracement of the rise from $2.922 and the smaller than target of the wave down from $3.37. Settling below $3.09 would clear the way for a test of $3.01 and possibly lower.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural Gas Technical Analysis and Near-Term Outlook

Natural gas overcame $2.96 as called for and challenged the next objective at $3.04. Today’s close well above $2.96 and the psychologically important $3.00 level is bullish for the outlook. This calls for natural gas to challenge at least $3.09 and likely $3.14 during the next few days. The $3.14 objective is a crucial objective for the primary wave up from $2.072. However, $2.96 was in line with the smaller than (0.618) target of the primary wave up from $3.373, and this wave targets $3.20 as its equal to target. Therefore, odds for an eventual move above $3.14 to $3.20 and higher have increased based on the close above $2.96.

With that said, the $3.04 target discussed in yesterday’s update is a confluent projection of the subwaves up from $2.373 and $2.610. Also, the move up from 2.638 lacks a clear wave structure that is large enough to support a continued rise. Therefore, a test of support will probably take place soon, and almost certainly before natural gas overcomes $3.14.

Nevertheless, any move down will be corrective of the move up. Should natural gas turn lower early tomorrow look for initial support at $2.96 and key near-term support at $2.90. Settling below $2.90 is doubtful but would clear the way for a more substantial test of support before the move up ultimately continues.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural Gas Technical Analysis and Near-Term Outlook

Natural gas is settling into a trading range as expected. Near-term technical factors are well balanced, and the narrowing range is forming a coil pattern. In this case, the coil is taking shape after a decline, so odds would normally favor a break lower out of the pattern. However, coils are not the most reliable patterns in regard to predicting a directional breakout. Coils reflect uncertainty, which is currently the case for natural gas as it sorts through conflicting short-term bullish and bearish external factors (weather forecasts, hurricane shut-ins/demand destruction, LNG demand, falling production, etc.).

This afternoon’s move is a good example of the recent indecisiveness. After rising to challenge the smaller than (0.618) target of the wave up from $2.373 at the $2.686 swing high, prices fell to test the smaller than target of the wave down from $2.727 at the $2.540 swing low. This was also the 62 percent retracement of the rise from $2.466. The subsequent move up to $2.633 stalled at the 62 percent retracement of the decline from $2.686.

With that said, natural gas will likely remain range-bound for another day or two. During that time, the waves that form should help determine the direction of the pending coil breakout.

For now, based on this afternoon’s decline from $2.633, odds lean in favor of testing coil’s lower trendline around $2.54 early tomorrow. This level will probably hold, at least initially. Nevertheless, a close below $2.54 will call for $2.46, which then connects to key lower support at $2.40.

Conversely, should natural gas fail to reach $2.54 before overcoming $2.67 a short-fall within the coil will form. This is a bullish signal that triggers when prices within a pattern like a coil fail to test a trendline, in this case, the lower trendline around $2.54. Settling above $2.67 will call for key resistance at $2.76, which then connects to $2.83 and higher.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural Gas Technical Analysis and Near-Term Outlook

Natural gas held major support at $2.43 and today’s move up implies that a larger test of resistance should take place tomorrow. The move up is still considered to be corrective of the recent decline and must settle above $2.67 to state that the move down might be complete. Natural gas will have to settle above $2.78 to reestablish a firm bullish outlook. Such a move is doubtful without a significant boost from external factors.

Near-term odds favor at least $2.60 and likely $2.67. These are the smaller than (0.618) and equal to (1.00) targets of the primary wave up from $2.425. The $2.67 objective is also near the 38 percent retracement of the decline from $3.002 and is Tuesday’s midpoint. Settling above this would suggest that the move down is complete. However, as stated above, November natural gas will have to settle above $2.78 to confirm a bullish outlook.

With that said, the overarching bias remains bearish due to Tuesday’s decline and the large seasonal rollover gap on the continuation chart. Even so, $2.43 is major support that could form a bullish base because it is the equal to target of the wave down from $3.002, the 62 percent retracement of the rise from $2.072, and the 200-day moving average. Therefore, while $2.43 holds, near-term odds will continue to favor a larger test of resistance.

Should natural gas take out $2.48 early tomorrow look for another test of $2.43. Settling below this will call for a much more significant move down before stalling again.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.